One area in where I am seeing a lot of strength relative to the entire market is in coal. Demand for the first half of 2009 was significantly better than in 2008. Even though investors have shown buying in coal, uranium stocks are grossly undervalued. I feel that the best risk to reward investment right now is in key uranium companies that have production and global assets.

The company that has key assets all over the world and that is trading way below book value is Denison Mines. Not only are they the key uranium miner in the USA and Canada but they have key assets in Zambia and Mongolia.

We are seeing demand in precious metals and coal. Uranium will follow and Denison will lead the way. They have survived 50 years in bad markets and already the first half of this year has shown increasing demand and it is not reflected in the stock price.

Denison has been hugging the 200 day moving average as support. I have seen this pattern repeated many times. This is a consolidation period before a major breakout. It has had two significant accumulations 4 months apart. Our next one is overdue and I believe that it has all the odds in favor of a major move.